Chase's definition is what you could reasonably expect to use as an annual income. This is not the same as the maximum amount you could withdraw. Reasonable expectation does not imply certainty, but it does require plausibility. If you have been withdrawing 4% of a retirement account balance each year, I'd say it's not plausible to assert that your income is the full value of your retirement account, even though you "could" withdraw it all.
Yes. The harder question is whether you could reasonably expect to withdraw 4% even if history has been lower. In my secure messages to Chase I usually specify 3% as an example. Sometimes they've said this is fine, sometimes they've replied with gibberish. They've never responded by saying no. As noted above, relying on their answers may not be wise.
By the way, I've never actually specified more than actual cash flow, but would like the answer to this, especially since I've had people ask me this question and have seen it asked on financial forums.